Albert Lea Art Center wins lawsuit against landlord

Published 11:29 am Wednesday, November 16, 2011

A Freeborn County District Court judge ruled in favor of the Albert Lea Art Center this week in the two-year-old lawsuit against its landlord.

Judge Steve Schwab on Monday granted the Art Center’s request to terminate its 99-year lease with property owner Susanne Crane and awarded the Art Center $458,000 in damages and contractual breaches.

The lease will be rescinded in 120 days.

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The judgment states Crane breached the lease by disturbing the Art Center’s “quiet enjoyment” of the building and by barring use of certain leased areas, including the common areas and the basement. It also stated Crane committed a “wrongful eviction.”

Though the order means the Art Center will have to find a new home, Art Center Board President Lu Callstrom said she is pleased with the outcome.

“We appreciate the court taking the time necessary to make a proper decision,” Callstrom said. “This has been a very difficult chapter in the Art Center’s long history. While we never wanted to be involved with the legal process like this, we were given no choice by our landlord. We are now anxious to move on with our business of proudly promoting the arts in Albert Lea and the surrounding area.”

Calls to Crane went unreturned Wednesday.

The history of the case

The Albert Lea Art Center, a nonprofit organization, was established in 1959. When it was first established, the organization moved from place to place. From 1975 to 1986 it operated out of the small church at 501 W. Main St., now known as Something Special In the Nest.

In 1986 it purchased the building at 224 S. Broadway Ave. in downtown Albert Lea — known to many longtime Albert Leans as the Rivoli Theater.

Though the building was well-suited for the Art Center’s purposes, the operating expenses were higher than what was preferred. Because of this, the organization’s board was interested in selling the building to a third party in exchange for a long-term lease for minimal rent, according to court documents.

In November 2005, Crane — a board member at the time — purchased the building from the Art Center for $40,000 with a down payment of $4,000. The balance of $36,000 would be paid back over 15 years with 6 percent interest. In return, Crane would lease the building back to the Art Center for 99 years at $1 per year.

She also agreed to renovate the building, live there and lease it.

However, shortly after the transaction, the relationship between the two parties began to deteriorate, documents state. The relationship was even described by board members as “toxic.”

Allegations of misconduct from both sides began coming forward.

Crane called the Art Center a “hostile tenant” because of some of the alleged actions of its board members, and she sought to evict the Art Center in 2007. Her efforts were dismissed in April 2008.

The parties disagreed over who had legal ownership of the building and have argued about responsibilities, behavior and proper procedures. They fought over seemingly petty items, such as keys to the restrooms.

The Art Center filed its own lawsuit against Crane in May 2009, alleging breach of lease, refusal of possession, breach of fiduciary duties, among others. Simply stated, the organization sued Crane to get her to honor her initial contract from 2005. The organization also sought damages related to Crane’s “past wrong-doing.”

In his order, Schwab stated Crane limited the Art Center to use of only one bathroom, evicted the Art Center from the basement, removed property from the common area, harassed staff, volunteers and guests, and did not make or pay for repairs to the building. Likewise, documents state Crane barred certain Art Center board members from the building, imposed arbitrary hours the building could be open, failed to pay utilities in a timely fashion and did not allow the Art Center to maintain thermostats in its space.

Of the money Schwab ordered Crane to pay, $7,193 was for Crane’s portion of the utility bills that were paid by the Art Center.

The ruling followed a five-day trial that ended Aug. 17.


What’s next?

Callstrom said the Art Center will be looking for a new home, though at this point she does not know when or how that will take place.

“We will continue to operate as an art center,” she said. “Nothing has come to an end or stopped. We continue going on forward. Nothing will prevent us from promoting our mission and fulfilling that.”

She said since Schwab’s ruling came out, a committee of board members has met to talk about what has happened.

She described the group as “very relieved.”

“We’re very, very happy with the ruling, and we feel that justice has been done,” Callstrom said. “We simply presented the evidence at trial and then let the judge decide what was right.”